Small-Scale Power Systems Take Center Stage in Majlis Meeting

Current policies ruling the market of small-scale power plants with distributed generation systems that use diesel generators have drawbacks and require revision, the rapporteur of Majlis Energy Commission said.

“The main disadvantages of power plants using diesel generators include reliance on foreign technology and low efficiency,” Asadollah Qarekhani was also quoted as saying by IRNA on Tuesday.

He made the statement on the sidelines of a meeting in the parliament in which the operators of power plants with a distributed generation system voiced their concerns facing the industry.

Distributed generation, or DG, refers to electricity produced in small quantities near the point of use. It reduces the cost and complexity associated with transmission and distribution, while offsetting peak electricity demand and stabilizing the local grid.

Qarekhani said DG power plants receive the needed gas based on the tariffs of industrial units while DG plant operators owners said the gas feedstock prices are so high that it is not economical to keep small-scale plants up and running.

To solve the problem and reach a middle ground, the commission is set to hold another meeting with representatives of Iran Power Generation, Distribution and Transmission Company, the National Iranian Gas Company and Planning and Budget Organization of Iran.

As Iranian Energy Ministry's plan is to curb power outages and put an end to building huge conventional power plants, the construction of distributed generation plants is on the ministry's agenda. It has also urged the private sector to invest in small-scale power projects nationwide.

But some private investors believe investment in smaller units has more disadvantages than benefits, as it could lead to the import of turbines with short life cycles and low efficiency.

They say the process will not only result in fuel wastage, but also waste investment in the sector.

The government has guaranteed the purchase of electricity generated from DG power plants for five years.

Government officials say that supplying electricity to villages is one of the industry’s main missions.